PRESS RELEASE BY THE MINISTRY FOR FINANCE

The Opposition leader Dr Simon Busuttil thinks that he can fool and mislead the people for the sake of downplaying a historic 36-year record made by this Government-a fiscal surplus on its public accounts.

Many were the Nationalist administrations that could not achieve this fiscal target, in spite of trying hard. Who can forget the various years given in the past as surplus fiscal targets-2010, 2011 and 2012. At one time this came to look like a futile crusader’s search for the holy grail.

Dr Busuttil talks of a slashing of capital expenditure in 2016 over the previous year. He knows very well that there was no slashing of capital expenditure in 2016. That year was a normal year for its place in the EU Funds Budgetary cycle. The year 2015, however, was not normal at all. It was an exceptional one where capital expenditure reached an all-time high, for the simple reason that this government had the unenviable task of spending EU funds which had been left largely unspent by the previous government during the 2007-2013 multi-financial framework. Indeed, 2015 was an exceptional year in which the government managed to utilise all the allocated EU funds, in spite of the enormous logistical tasks involved in implementing many projects in one year.

In 2016 we were back to a normal expenditure year during which, admittedly, and statistically, the capital expenditure was lower than the previous year (2015).

But Dr Simon Busuttil ought to know, too, that EU projects have practically a neutral effect on government public finances. Since programmes are EU funded, increasing or decreasing EU programmes would affect the inward flow of EU funds accordingly, leaving an almost negligible effect on the balance.

It is quite rich of the Leader of the Opposition to downplay the government’s historic achievement of turning a Euros 362 million deficit in 2012, Malta’s biggest deficit on record left as legacy by the party he now leads, into a surplus in just four years. Incidentally, the capital expenditure during those years (2010 to 2012) was at the same level of 2016. Still, a budget surplus then had remained a pipe-dream.

Source: Government of Malta